At the next Brighton & Hove Council meeting on March 24th, Labour will be tabling their plans for a citywide financial inclusion programme, which were eventually accepted by the Conservative administration, as part of the £2.5million worth of Labour amendments to their budget.
The £400,000 strategy will target vulnerable people during these tough economic times, with financial support, such as tackling loan sharks, advice on personal budgeting, working to increase the number of residents with basic bank accounts, providing access to affordable credit and offering debt advice via outreach in communities.
A large part of the programme will also set-out to eliminate illegal loan sharking on the city’s streets. There have been examples of loan sharks charging 117,000% APR and a lot of these cases can be prevented simply by raising awareness of illegal loan sharking, but also by providing alternatives. Labour would like to see the council work with partners, such as credit unions, to promote the affordable credit schemes available, which would help eliminate dodgy doorstep lenders and loan sharks.
Labour would also seek to highlight the dangers of legal credit companies who have been known to charge rates of up to 2,500% APR in what are known as payday loans and are becoming increasingly popular. As part of this citywide financial inclusion programme, Labour will be backing calls recently made by Labour’s Stella Creasy MP, to end legal loan sharking and lobbying national government for more regulation of credit.
This strategy is included in Labour’s 2011-2015 manifesto, which will look at the need to build more of a sustainable economy in Brighton & Hove, due to the concerning amount of local people out of work or on low incomes, children in poverty, and the potential increase in the city’s already high amount of 16-18year olds who are not in education, employment or training.
Brighton & Hove Labour Leader, Councillor Gill Mitchell, said:
“During these tough economic times, local people are facing a further wave of financial pressures with an increased cost of living, especially with the rise in VAT, and benefit cuts which will hit people, who are already struggling, hard this year, along with the rise in unemployment.
“We have seen an increase in both illegal and legal loan sharking recently, both targeting vulnerable people with dodgy doorstep deals or ‘payday loans’. Not only do these moneylenders blight many people’s lives, and charge astronomical interest rates, they can also intimidate customers who get into difficulties with their payments.”
Labour MP, Stella Creasy, who has led calls for a Credit Regulation Bill and led the End Legal Loan Sharking Campaign, said:
“Action is needed now to address the high cost of lending which exploits some of the poorest people in our communities who can least afford the charges door step lenders set.”